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BUS650: Managerial Finance (MAH1209A)

Dr Charles Smith

March 18, 2012.

The Cost of Capital for Goff Computer, Inc.:

1. Most publicly traded corporations are required to submit 10Q (quarterly) and 10K (annual) reports to the SEC detailing their financial operations over the previous quarter or year, respectively. These corporate fillings are available on the SEC Web site at www.sec.gov. Go to the SEC Web site, follow the “Search for Company Filings” link, the “Companies & Other Filers” link, enter “Dell Computer,” and search for SEC filings made by Dell. Find the most recent 10Q and 10K and download the forms. Look on the balance sheet to find the book value of debt and the book value of equity. If you look further down the report, you should find a section titled either “Long-term Debt” or “Long –term Debt and Interest Rate Risk Management” that will list a breakdown of Dell’s long-term debt.

Answer:

The book value of a company's equity is the same as stockholder's equity, which can be computed by subtracting the total value of liabilities from total assets.

(Total Assets) = (Total) Liabilities + Stockholder's Equity (book value of equity).

Stockholder's Equity (book value of equity) = Total Assets –Total Liabilities.

The book value of the company’s liabilities and equity was found from the site http://www.sec.gov . I found Dell’s Form 10K, dated January 28, 2011, and snap shot is attached here with. Dell’s Form 10K shows the following:

Book value of equity: 10-k:

Total Assets =38,599 millions; Total Liabilities = 30,833 (Dell 10-K, January 28, 2011, p.57)

Book value of equity = Total Assets –Total Liabilities = $38,599 – $30,833 = $7,766 millions, (Dell 10-K, January 28, 2011, p.57).

The book value of the company’s liabilities and equity was found from the site http://www.sec.gov…...

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